While some economists, like Nouriel Roubini, believe we’re inching toward a crisis point — one that could drop the U.S economy back into recession — others, like the folks at Seeking Alpha, maintain that the economy is an upward path, with a stronger stock market a good sign of future growth.
If you had to make the call, you might say that the doom-sayers have the upper hand right now. Certainly, mortgage lenders aren’t buying it, as mortgage interest rates are down again this week, as measured by the BankingMyWay Weekly Mortgage Rate Tracker.
That’s good news for house hunters, who once again are treated to the twin delights of low mortgage rates and cheap home prices. Home prices are down because demand is down — and the federal government’s new home tax credit is now officially over, further crimping demand.
On that front, the Mortgage Bankers Association released its Weekly Mortgage Applications Survey for the week ending May 14. In it, Michael Fratantoni, MBA's vice president of research and economics, points to the impact the end of the tax credit is having on the mortgage market:
"Purchase applications plummeted 27 percent last week and have declined almost 20 percent over the past month, despite relatively low interest rates. The data continue to suggest that the tax credit pulled sales into April at the expense of the remainder of the spring buying season. In fact, this drop occurred even as rates on 30-year fixed-rate mortgages continued to fall, and at 4.83 percent are at their lowest level since November 2009. However, refinance borrowers did react to these lower rates, with refi applications up almost 15 percent, hitting their highest level in nine weeks."
Past that, the rate picture isn’t as clear, with myriad factors driving mortgage rates back downward these days.